Table of Contents
I. POLICY PURPOSE
II. APPLICABILITY
III. DEFINITIONS
Allowances
Average Weekly Wage (AWW)
AWW Earning Period
Best Available Evidence
Bonuses
Cafe 125
Deferred Compensation Deductions
Deferred Compensation Account
Disbursements
Earning Period
Employer Contributions to Employee
Health Care Plan
Foster Child Care Payments
Frequency of Earnings
Full Weekly Wage (FWW)
FWW Earning Period
Gross Earnings
Passive Income
Per Diem Payments
Reimbursements
Regular Earnings
Retirement Benefits
Self-Employment Earnings
Severance Pay
Social Security Benefits
Statewide Average Weekly Wage (SAWW)
Stipends
Tips
Unemployment Benefits
Vacation Pay
IV. POLICY
A. Wage Calculation and Wage
Setting: General
B. Evidence of Earnings
C. Earnings Included and
Excluded in Wage Calculation
D. Calculating the FWW
E. Calculating the AWW
F. Wages Set by Order
G. Resetting Wages
H. Adjusting Previously Paid
Compensation
V. PROCEDURE: CLAIM OWNER
A. General Claim Note and
Documentation Requirements
B. Request for Earnings
C. Reviewing Earnings
Information
D. Referral to Wage Team
E. Issuing the Order to Set
Wages
F. Requests to Set or Reset
Wages
G. Resetting Wages Set by
BWC Order
H. Resetting Wages
Previously Set by IC Order
I. Making Payment Based on
a BWC or IC Order
J. Adjusting Previously Paid
Compensation
VI. PROCEDURE: WAGE TEAM
A. General Claim Note and
Documentation Requirements
B. Calculation of Wages:
General Information
C. Earnings Included and
Excluded from Wage Calculation
D. Converting Earnings to a
Weekly Rate
E. Calculating the FWW
F. Calculating the AWW
The purpose of this policy is to ensure BWC calculates the
full weekly wage (FWW) and the average weekly wage (AWW) consistently and in
compliance with the law.
This policy applies to all BWC Claims Services staff.
Allowances:
Payments of a set amount made to an employee at given intervals for a specific
purpose. Allowances are paid without requiring proof that the employee spent
the allowance monies on the specific purpose. Common types of allowances
include payment for travel, uniforms, laundry, and housing.
Average Weekly Wage (AWW):
Basis upon which to compute benefit payments for temporary total (TT)
compensation (disability) and living maintenance (LM) compensation after the
initial 12-week period of disability; death benefits; permanent total
disability (PTD) benefits; percentage of permanent partial disability (%PP)
benefits; wage loss (WL) compensation; and may be used for payment of living
maintenance wage loss (LMWL) if greater than the full weekly wage (FWW).
AWW Earning Period:
The timeframe in which the injured worker (IW)’s earnings are used to calculate
the AWW which is the 52 weeks prior to the date of injury (DOI), or date of
disability (DOD) in occupational disease (OD) claims, excluding periods of
unemployment beyond the IW’s control (including but not limited to sickness,
industrial depression, strike, lockout).
Best Available Evidence:
For purposes of this policy, BWC defines best available evidence as the more
detailed earnings information for the earning period (e.g., a payroll report
from the employer that provides more detail than a W-2).
Bonuses:
Payments made to an employee by an employer, which are in addition to regular
earnings.
Cafe 125:
Non-taxable money set-aside from earnings that is generally used for employee
contributions towards health care, life insurance or daycare.
Deferred Compensation Deductions:
Deductions the employer makes from an employee’s pay that the employee can
receive at some later date.
Deferred Compensation Account
Disbursements: Retirement income paid from previously
deferred funds.
Earning Period:
Period of time used to identify earnings to be included in the FWW and AWW wage
calculations. Earning periods are generally based on full pay periods prior to
the DOI, or DOD in OD claims (e.g., 52 full weekly pay periods).
Employer
Contributions to Employee Health Care Plan: Payments
made by the employer toward the purchase of a health-care plan for the
employee.
Foster Child
Care Payments: Payments made to foster parents to
cover the costs of care for a foster child.
Frequency
of Earnings: How often pay is received (e.g.,
weekly, biweekly, monthly).
Full
Weekly Wage (FWW): Basis for payment of
compensation for the first 12 weeks of TT or LM and may be the basis for LMWL
if it is greater than the AWW.
FWW
Earning Period: The timeframe in which the IW’s
earnings are used to calculate the FWW. The FWW is ordinarily based on the IW’s
earnings when the IW has been continuously employed (with the employer of
record (EOR) or any other employer) for six weeks or seven days prior to the DOI,
or DOD in OD claims.
Gross Earnings:
Earnings prior to any deductions (e.g., taxes, insurance, tax-deferred programs,
garnishments).
Passive Income: A
type of unearned income that is acquired with minimal labor to earn or
maintain. Passive income may include income reported on IRS Schedule E (e.g.,
rental properties, royalties, partnerships, S corporations, trusts); retirement
benefits; disbursements from a deferred compensation account; rental property
income; or income from the stock market.
Per
Diem Payments: Payments made by the employer to
the employee as a daily expense allowance.
Reimbursements: Payments
made to an employee based on actual cost to the employee and may require the
submission of receipts to the employer (e.g., travel, uniforms, laundry, and
housing).
Regular
Earnings: For purposes of this policy, regular
earnings are defined as the hourly rate times hours worked or a predetermined,
fixed amount (regular salary).
Retirement
Benefits: Pay to an employee who has left
employment due to reaching a specific age, or specific number of years of
service, or at the election of the employee.
Self-Employment
Earnings: Net income (income after expenses) an
individual earns in association with certain types of solely owned or partially
owned businesses.
Severance
Pay: Pay given to an employee upon termination of
employment.
Social
Security Benefits: Payments made by the Social
Security Administration to an individual because of retirement, death, or
disability.
Statewide Average Weekly Wage
(SAWW): The average weekly earnings of all workers employed
in Ohio employment, subject to Chapter 4141 of the Ohio Revised Code.
Stipends: Allowance
for daily living expenses paid by the employer.
Tips: Money
given by a patron to a servant, waiter, or other similarly related individual
for services rendered.
Unemployment
Benefits: Benefits paid by a government agency to
an individual who has lost employment.
Vacation
Pay: Payment from an employer to an employee for
a break or holiday from work.
A.
Wage Calculation and Wage Setting: General
1. It
is BWC’s policy to calculate the FWW and AWW in a claim based on the best
evidence available at the time of calculation.
2. BWC
will request earnings and attempt to calculate wages:
a. In
all lost-time claims (including when a claim changes from medical- only to lost-time);
b. When
there is evidence on file that a medical-only claim will become lost-time; or
c. Upon
receipt of an Application for Determination of Percentage of Permanent
Partial Disability or Increase of Permanent Partial Disability (C-92).
3.
BWC will convert earnings that are paid with a frequency other than
weekly or biweekly to a weekly rate for purposes of calculating wages.
4. The
earning periods for the calculation of wages will be determined based on full
pay periods prior to the DOI, or DOD in OD claims.
5.
When setting wages for the purpose of paying compensation other than
%PP, BWC will set both the FWW and AWW.
6. When
setting wages for the purpose of paying %PP, BWC will set:
a. Both
the FWW and the AWW when detailed earnings information is available; or
b. Only
the AWW when detailed six-week and/or seven-day prior earnings are not
available.
7. BWC
will set wages in a medical-only claim upon a written request (e.g., Motion (C-86),
Wages – IW or Wages – Emp) with attached supporting
documentation.
B.
Evidence of Earnings
1.
It is the responsibility of the IW to provide earnings information for
the calculation of wages upon BWC’s request. The EOR may also provide evidence
of earnings to BWC.
2. Evidence
of earnings includes, but is not limited to:
a. Payroll
reports from an employer;
b. Copies
of check stubs;
c. Income
tax returns signed by the IW or another person who prepared the taxes and has
the authority to sign on the IW’s behalf;
d. W-2s
for the year of and/or year prior to the DOI, or DOD in OD claims;
e. 1099
forms for the year of and/or year prior to the DOI, or DOD in OD claims when
accompanied by:
i.
Evidence of expenses related to the earnings; or
ii. An Injured
Worker Earnings Statement (Wages – IW) form, or equivalent
statement that shows there were no expenses related to the earnings;
f.
Social Security reports of earnings that include the IW’s name;
g. Employer
Report of Employee Earnings (Wages – Emp) form, or equivalent
statement signed by the employer;
h. Wages
– IW form, or equivalent signed by the IW.
i.
The Wages – IW form, or equivalent may be submitted without
supporting documentation (unless specifically noted on the Wages – IW),
but it is BWC’s policy to use its discretion when determining if additional
information is required prior to calculating wages.
ii. If
BWC suspects that wages reported as income have not been reported to the IRS,
BWC may notify the IRS of any discrepancy (e.g., S-Corporation profits,
partnership profits).
C.
Earnings Included and Excluded in Wage Calculation
1. The
types of earnings included in BWC’s calculation of wages include, but are not
limited to:
a. Gross
regular earnings, before deductions such as deferred compensation, Cafe 125,
etc.;
b. Tips;
c. Self-employment
earnings (e.g., Form 1040 Schedule C);
d. Allowances
(e.g., uniforms, tools, etc.);
e. Bonuses
related to direct and active participation in employment during the earnings
period (e.g., performance bonus);
f.
Profit sharing related to work activity (e.g., earned based on hours
worked, product produced, or other earnings related to work activity);
g. WWL
or LMWL paid in a prior workers’ compensation claim (in addition to earnings
from an employer);
h. Per
diem or stipend payments;
i.
Vacation, sick leave, and holiday pay for periods which fall within the
earnings period;
j.
Lump sum payouts for vacation, sick, personal, or other leave is
included for AWW calculation only;
k. Farm
income (e.g., Form 1040 Schedule F);
l.
Earnings reported on the IW’s federal income tax return that are
specifically subject to either Social Security withholding, Medicare
withholding, or self-employment tax (e.g., housing allowance);
m. Income
specifically subject to self-employment tax (Schedule SE); or
n. Payment
received in lieu of receiving health insurance.
2.
The types of earnings excluded in BWC’s calculation of wages include,
but are not limited to:
a. Bonuses
unrelated to work activity (e.g., shareholder bonus, contract ratification,
company-wide holiday bonus);
b. Profit
sharing unrelated to work activity (e.g., owns stock, dividends);
c. Disbursements
from previously deferred compensation;
d. Retirement
benefits paid from Social Security or other retirement programs;
e. Employer
contributions to employee health-care plans;
f.
Payment received for foster care of children;
g. Reimbursement
for items such as travel, uniforms, etc.;
h. Non-working
wage loss (NWWL) compensation paid in a prior workers’ compensation claim;
i.
Workers’ compensation benefits paid in a prior claim due to inability to
work (i.e., TT, LM, or SC, including occupational injury leave (OIL);
j.
Unemployment benefits;
k. Passive
income;
l.
Severance pay; and
m. Other forms of
income reported on an IW’s tax return that are not subject to Social Security
withholding, Medicare, or self-employment tax, including, but not limited to:
i. Interest
income;
ii. Dividend
income;
iii. Taxable
refunds of state and local income taxes;
iv. Alimony
received;
v. Capital
gains;
vi. Other gains
reported on IRS Form 4797;
vii. IRA distributions;
viii. Pension distributions;
ix. Income reported
on Schedule E (including, but not limited to, rental real estate, royalties,
partnerships, S corporations, trusts);
x. Social
Security benefits;
xi. Other income
not subject to self-employment tax (Schedule SE); and
xii. Tuition reimbursement
(1098T).
D.
Calculating the FWW
1. For
IWs who have been either continuously employed for six weeks prior to the DOI,
or DOD in OD claims, or worked at least seven days prior to the DOI, or DOD in
OD claims, the FWW will be the higher amount of either:
a. The
gross earnings, including overtime pay, for the six weeks
prior to the DOI, or DOD in OD claims, divided by six; or
b. The
gross earnings, excluding overtime pay, for the seven days
prior to DOI, or DOD in OD claims.
2. For IWs
who have not been continuously employed for six weeks prior to the DOI, or DOD
in OD claims, and who have not worked for at least seven days prior to the DOI,
or DOD in OD claims, the FWW is calculated by multiplying the hourly rate times
the number of hours the IW was scheduled to work the week of the DOI, or DOD in
OD claims.
3. When
no earnings are submitted to BWC to support an FWW calculation, BWC must set
the FWW equal to one-third of the SAWW.
4. When
the IW had no earnings in the six weeks prior to the DOI, or DOD in OD claims,
BWC will set the FWW at $0.
E.
Calculating the AWW
1. The
AWW is calculated by dividing the total earnings for the 52 weeks prior to the
DOI, or DOD in OD claims, by 52 minus any weeks that should be excluded.
2. Except
as described in IV.E.3 immediately below, BWC will set the AWW at $0 when no
earnings are submitted to BWC to support an AWW calculation for the 52 weeks
prior to the DOI, or DOD in OD claims.
3. BWC
will not set the AWW without earnings information for the purpose of paying:
a. A
%PP award, as there is no minimum award for this benefit type; and
b. NWWL,
working wage loss (WWL), or LMWL, as earnings information is required to prove
a loss of earnings to be eligible for these benefits.
4. Periods
of Unemployment
a. Periods
during which an IW is unemployed for reasons beyond their control are generally
excluded from AWW calculation with appropriate documentation. Reasons beyond
the IW’s control include, but are not limited to:
i.
Sickness of the IW or a family member the IW had to care for;
ii. Industrial
depression;
iii. Strike or
lockout;
iv. Disability
related to a prior workers’ compensation claim; or
v. The
IW was unemployed but was seeking employment (additional requirements for
seasonal workers detailed below);
b. Weeks
during which an IW participated in paid job training or job-seeking skills
training while receiving unemployment will be excluded. This does not include
periods of job training with an employer.
c. The
periods during which the IW received partial unemployment benefits while
working will be excluded if the IW provides evidence that they continued to
seek full-time employment during that period.
d. Other
reasons to exclude weeks from AWW calculation include, but are not limited
to:
i.
Pregnancy or parental leave of the IW, excluding an extended period
based on the IW’s choice instead of medical necessity; or
ii. The
IW is new to the workforce (i.e., the IW recently graduated from high school or
college).
e. Seasonal
Workers
i.
Seasonal workers must show that they were looking for work during
periods of unemployment.
ii. If
seasonal work is a lifestyle choice, weeks of unemployment are included in the
wage calculation, regardless of whether proof of a job search is submitted.
f.
Incarceration
i.
In general, periods of unemployment that were the result of the IW being
incarcerated are included in the calculation of the AWW.
ii. Reasons
these periods may be excluded include:
a) The
IW is confined during a trial but is found not guilty; or
b) The IW is
exonerated.
g. If
the IW has not worked for reasons within their control (e.g., IW stayed home to
care for children), those weeks are generally included in the calculation.
5. If
the IW presents special circumstances that make the method BWC uses to set
wages unfair, BWC may use an alternative method for setting wages to
provide substantial justice.
F.
Wages Set by Order
1. BWC
will issue an order to:
a. Set
the initial FWW and/or AWW in a claim; or
b. Reset
wages when it is within BWC’s jurisdiction to do so.
2. When
the Ohio Industrial Commission (IC) has previously ruled on the setting of
wages, BWC will refer the request to reset the FWW and/or AWW to the IC with
BWC’s recommendation regarding the resetting of wages.
3. BWC
will make payment in accordance with a BWC or IC order on wages.
G. Resetting
Wages
1. BWC
will re-evaluate wages only upon receipt of:
a. A
written request on a C-86, Wages – IW, or Wages – Emp, or the
equivalent; and
b. New
evidence that is more detailed than that which was used in the prior
calculation of wages.
2. When
the IC has only ruled on one of either the FWW or AWW, BWC retains jurisdiction
to reset wages not ruled on by the IC (e.g., the IC ruled only on the FWW, so
BWC may reset the AWW).
3.
BWC may adjust the FWW and/or AWW even when the written request is only
for one or the other, but the evidence supports re-evaluation of both.
4. BWC
will issue a BWC order to reset the FWW and/or AWW when an error in the prior
calculation is discovered.
H.
Adjusting Previously Paid Compensation
1. BWC
will adjust previously paid compensation when wages are reset and a BWC or IC
order has been issued that includes language ordering the adjustment of
previously paid compensation.
2. When
an adjustment to wages is made based on a request from a party to the claim and
additional payment is due to the IW, the adjustment will be limited to
compensation paid within the two years prior to the filing date of the request.
3. When
BWC makes an adjustment to wages without a request from a party to the claim,
and additional payment is due to the IW, all compensation paid in the claim
will be adjusted.
4. All
compensation paid in the claim will be adjusted when the change in wages
results in the IW being overpaid, no matter who initiates the adjustment.
a. The
amount of the overpayment will be determined after the order to reset the wages
is final.
b. Refer
to the Overpayment of Compensation policy and
the Adjustment of Overpaid Compensation policy
for information regarding declaring and collecting an overpayment.
1. BWC
staff will refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Must
follow any other specific instructions for claim notes and documentation
included in this procedure.
1. The claims
service specialist (CSS) must request wage information from the EOR and IW, or
their representatives in all lost-time claims, and in medical-only claims where
lost time will likely occur (e.g., IW is working light duty but is scheduled
for a surgery related to the claim). In the event this was not completed at the
initial allowance, the CSS must request wage information regardless of where
the claim is in the process.
a.
The CSS must:
i.
Make at least one phone call to the parties to the claim. If the initial
phone call was unsuccessful, the CSS must send a follow-up letter via fax, email,
or mail.
ii. Document
all attempts to gather the earnings in the claims management system.
b. During
contact with the EOR, the CSS should
i.
Determine if the IW was employed by the EOR for the 52-week period prior
to the DOI, or DOD in OD claims;
ii. Request
earnings for the 52 weeks prior to the DOI, or DOD in OD claims, or for
whatever portion of that time the IW was employed by the EOR;
iii. Explain that the
amount submitted should be the gross earnings;
iv. Verify or
obtain the hourly rate and the scheduled work hours;
v. Explain
that if the IW has income such as tips, commissions, bonuses, allowances, or
income other than their regular earnings, the EOR must provide additional
information regarding these earnings; and
vi. Inform the
EOR that the Wages – Emp form:
a) Can be
completed online if the EOR logs into their BWC account;
b) Is available
online to be printed by the EOR; or
c) BWC
can send a copy to the EOR upon request.
c. During
contact with the IW, the CSS should explain that:
i.
BWC will attempt to obtain earnings information from the EOR, but it is
the IW’s responsibility to provide earnings information for the EOR and from
all employers who employed the IW during the 52 weeks prior to the DOI, or DOD
in OD claims. This includes earnings from self-employment.
a) Earnings
information must be submitted in writing;
b) The
earnings amount submitted should be the gross earnings;
c) Any
earnings other than the IW’s regular earnings (e.g., tips, commissions,
bonuses, allowances, etc.) must be explained in writing;
d) If annual
earnings will be submitted, they must be for the year of and/or the year prior
to the DOI, or DOD in OD claims;
e) Any
unpaid weeks during the earnings periods must be explained and submitted on
a Wages – IW or Wages – Emp form, or equivalent
statement;
f) Permission
for BWC to obtain wage clarification from any employer other than the EOR must
be provided in writing on the Wages – IW form; and
g) The Wages
– IW form:
i) Is
available online and can be printed by the IW; or
ii) BWC
can send a copy to the IW upon request.
ii. BWC
calculates wages based on the earnings evidence the IW submits.
d. The
CSS must set a work item in the claims management system for three business
days after making phone, fax, or email contact with the IW, or 11 business days
after sending a letter to follow-up on receipt of earnings information.
2. If
no wage information was received following the initial request, the CSS must make
an additional attempt to obtain it.
a. The
CSS will either call the:
i.
IW if they are unrepresented; or
ii. IW
representative if the IW is represented.
b. If
the call is unsuccessful, the CSS will either send an email, letter, or fax to
request the missing information.
3. The
CSS must not rely on the managed care organization (MCO) note indicating wages
are $0. The MCO does not request wages from the parties to the claim and the
MCO is not responsible for requesting wage information. This is not considered
an attempt to obtain wages.
1. The
CSS must review detailed earning information upon receipt to identify any
missing information or variations in earnings that require an explanation.
a. If
detailed earnings (e.g., weekly, biweekly, monthly) are provided, the CSS should
attempt to:
i.
Identify any variations in earnings (e.g., weeks in which earnings are
much higher or lower than other weeks);
ii. Obtain
an explanation for any variations or unpaid periods identified by the EOR or
IW; and
iii. Document the
explanation in claim notes.
b. Earnings
information submitted by the IW without supporting evidence (e.g., copies of
pay stubs) must be provided with a Wages – IW form, or equivalent
statement.
c. Earnings
information submitted by an employer does not require a Wages – Emp
form, or equivalent statement.
2. If
52 weeks of earnings are not on file and no explanation for the missing weeks
has been documented, the CSS should attempt to contact the IW to request
additional evidence regarding earnings or unpaid weeks.
3. If
annual earnings are received for two years and there is a significant variation
between the years, the CSS should attempt to contact the IW for clarification.
4. If
the earnings information submitted includes a bonus, the CSS should attempt to
determine the nature of the bonus and the period over which it was earned.
5. If
the earnings information includes commission payments, the CSS should attempt
to determine the period over which the commission was earned.
6.
When 1099 tax forms are submitted as earnings, the CSS must ensure that
the 1099 forms are accompanied by:
a. Evidence
of expenses related to the earnings is provided; or
b. A Wages
– IW form, or equivalent statement that indicates there were no expenses
related to the earnings.
7. When
income tax statements are provided, the CSS must:
a. Make
certain the documents are signed by the IW, signed by a tax preparer, or
accompanied by a Wages – IW form, or equivalent statement which declares
that the documents submitted are a true and accurate copy of what was filed
with the IRS;
b. Obtain
W-2s or a Schedule C for self-employed IWs to support earnings amount;
c. Determine
if the return is a joint return, and if it is, verify that earnings for just
the IW can be identified; and
d. Redact
sensitive information provided for anyone other than the IW (e.g., spouse or
children).
8. If a
self-employed IW submits a copy of their quarterly income tax report, the CSS
will verify that the report is signed by the IW, a tax preparer, or accompanied
by a Wages – IW form, or equivalent statement declaring that the
documents submitted are a true and accurate copy of what was filed with the
IRS.
9. Self-employed
IWs may submit monthly profit and loss statements prepared by a tax preparer as
proof of earnings.
10. IWs may provide a Wages –
IW form, or equivalent to support periods of unemployment. The statement
must include an explanation of why the IW was not working and may require
additional supporting evidence.
a. Except
for seasonal employers, additional evidence to support periods during which the
IW received unemployment benefits is not required if BWC can verify the receipt
of unemployment benefits with the Ohio Department of Job and Family Services
(ODJFS).
b. Seasonal
employees must submit evidence of job search efforts for periods of
unemployment. Evidence may include:
i.
A signed statement on the Wages – IW form, or its equivalent
which describes the IW’s job search activity, including type of work they
looked for, and the method of job searches; or
ii. Copies
of confirmation from online job searches; or
iii. Copies of
correspondence with potential employers, job applications, resumes, or other
evidence of contact with employers.
c. The
EOR may provide evidence to support periods of unemployment (e.g., plant
shutdowns or layoffs).
d. The
CSS must collaborate with their injury management supervisor (IMS) to determine
if additional supporting evidence is needed.
11. If an IW submits evidence
that they were working and receiving partial unemployment compensation over the
same period, the CSS will:
a. Ask
the IW if they continued to search for a job during that period; and
b. If
applicable, request evidence of the IW’s job search efforts as described in Section
V.C.10.b above.
12. If, after a thorough review,
the CSS determines that the earnings information submitted is usable, the CSS
must make a referral to the Wage Team immediately.
13. If, after thorough review,
the CSS determines that the earnings information is not usable (e.g., pay stub
is unreadable) or requires clarification (e.g., the amounts do not make sense),
the CSS should attempt to contact the party that submitted the wage information
in question and either request new information or clarify the information on
file. The CSS must then:
a. Make
a referral to the Wage Team immediately upon receipt of the requested
information; or
b. If
the requested information is not received within the timeframes detailed in the
Mailbox
Rule policy and procedure, make a referral to the Wage Team with
whatever information is on file.
1.
In general, the CSS must send claims to the Wage Team for computation of
wages and setting of the FWW and AWW (this includes setting wages at $0 because
the IW had no earnings).
a. The
exception is if a claim meets all the following criteria:
i.
The IW had earnings, but they have not been submitted;
ii. The
claim is compensable; and
iii. There is
sufficient evidence on file to pay compensation.
b. In
these cases:
i.
The CSS must:
a) Make
two documented requests for wages; and
b) Request
that their IMS set the FWW at one-third of the SAWW.
ii. Prior
to setting the FWW, the IMS will:
a) Ensure
that the CSS has made two documented attempts to contact the IW/IW
representative and EOR/employer representative to request earnings;
b) Verify
that no wage information is in the claim;
c) Verify
the claim is in Pending status; and
d) Place a
note titled, “IMS reviewed FWW wage set at one-third SAWW” in the claim
authorizing the FWW to be set at one-third of the SAWW.
iii. The IMS may not
set the AWW at one-third of the SAWW.
2. Rush
Requests
a. In
certain situations, it may be necessary to make a rush request to calculate
wages. Valid reasons to make a rush request include:
i.
Catastrophic claims;
ii. Financial
hardship;
iii. Ombuds/Constituent
Affairs complaint issues;
iv. When the
claim is within one or two business days of the Day 28 determination; or
v. The
IC has ordered compensation to be paid.
b. If the
CSS believes that a rush request is necessary, they must staff the rush request
with their IMS.
c. The
IMS must:
i.
Verify that the CSS has properly followed policy and procedure and
documented their attempts to obtain necessary information; and
ii. Submit
the rush request to the BWC Wage
Calc Rush email box. It is not necessary to copy a Wage Team IMS on this
email.
3. In
death claims where there are no wages on file and BWC has been ordered to pay
death benefits, the CSS will make a referral to the Wage Team to set the AWW at
$0.
1. The
CSS must include the setting of wages in the BWC Initial Allowance Order
when:
a. Sufficient
wage information is available at the time the order is issued; or
b. Evidence
on file supports the payment of TT, but wage information has not been
submitted. In this case, the FWW must be set at one-third of the SAWW.
2. Upon
completion of the calculation of wages by the Wage Team, the CSS will include
and exclude the appropriate wage in the claims management system before
completing the BWC order.
3. If
the FWW has been set at one-third of the SAWW, Claims Services staff will
include a statement in the BWC order which informs the parties to the claim
that the FWW has been set based on the SAWW for the DOI, or DOD in OD claims.
4. Claims
Services staff will:
a. Use
the standard wage setting inserts provided in the BWC orders to set wages; and
b. Include
the rate at which any anticipated compensation will be paid.
1. Setting
Wages in a Medical-Only Claim
a. If a
C-86, Wages – IW, or Wages – Emp, or the equivalent, is filed with
supporting earnings information requesting the calculation of wages, the
Medical Claims Supervisor will reassign the claim to a lost-time office, who
will then evaluate the request.
b. If
earnings information is received without a written request, the medical claims
specialist (MCS) will:
i.
Contact the IW/IW representative to inform them that a written request
is required to set wages; and
ii. Reassign
the claim to a field office for processing.
2. Resetting
Wages Within the BWC Initial Claim Determination Appeal Period
a. When
new earnings information (e.g., more detailed information, missing earning
periods) that may impact the wage calculation is received, the CSS must:
i.
Send an email recalculation notification to the Wage CSS who did the
initial wage calculation and copy the Wage Team IMS; and
ii. Refer
the new evidence to the Wage CSS for a priority recalculation.
b. When
new evidence will not impact the wage calculation (e.g., annual earnings vs. wages
previously set using detailed earnings) the CSS must staff the issue with their
IMS to verify that no action is required.
3.
Resetting Wages Outside of the BWC Initial Claim Determination Appeal
Period
a. When
new wage information is received in the claim without a written request to
recalculate wages, the CSS must:
i.
Contact the filing party to inform them that a written request is
required to recalculate wages; and
ii. Not
refer to the Wage Team until the written request is received.
b. When
a written request with new earnings evidence is received that may impact the
wage calculation (e.g., BWC receives information about earning periods that
were previously missing, or BWC had annual earnings on file and receives
detailed earnings), the CSS must refer the request to the Wage Team for
recalculation.
c. When
new evidence will not impact the wage calculation (e.g., annual earnings vs. wages
previously calculated using detailed earnings) the CSS must staff the issue
with their IMS to verify no action is required.
d. If a
request to reset wages is received and the supporting evidence is unclear or
missing, the CSS must contact the filing party to clarify or obtain the evidence.
i.
If the CSS is unable to obtain the missing documentation, the CSS must:
a) Dismiss
the request using the BWC Miscellaneous Order if BWC previously set
wages; or
b) Follow the
steps outlined in Section V.H of this procedure if the IC previously set wages.
ii. If
additional information is submitted, the CSS may refer the claim to the Wage
Team to recalculate wages and follow:
a) Section
V.G of this procedure if BWC previously set wages; or
b) Section
V.H of this procedure if the IC previously set wages.
1. The
CSS may reset wages without a written request when BWC discovers an error in a
prior calculation. Prior to doing so, the CSS must staff the issue with their
IMS and BWC Legal to determine whether the adjustment should be made.
2. Issuing
a BWC Order to Reset Wages
a. The
CSS may issue a BWC order resetting wages when the IC has not previously set
the wages.
b. The
CSS will issue a BWC order to grant the new FWW and/or AWW if BWC’s evaluation
results in a higher FWW and/or AWW amount.
i.
The BWC order must include language that addresses the adjustment of
compensation.
ii. The
adjustment language in the BWC order must indicate:
a) The
type of compensation being adjusted;
b) Whether
the adjustment is for a closed period or for all compensation (previously paid
and/or future payments);
c) The
start date of the adjustment; and
d) If
applicable, that payments made prior to the order will be adjusted once the
order is final.
c. The
CSS will issue a BWC order to deny if:
i.
The evaluation results in no change to the FWW and/or AWW amount; or
ii. The
accompanying evidence is not more detailed than the evidence previously used to
set wages.
d. The
CSS will issue a BWC order to grant the new FWW and/or AWW if BWC’s evaluation
results in a lower FWW and/or AWW amount.
i.
If an overpayment results from the change in wages, the CSS will address
the overpayment once the wage order is final.
ii. When
the wage order becomes final, the CSS will create a separate BWC order
establishing the overpayment amount, if applicable.
1. Only
the IC has jurisdiction to reset wages previously set by IC order.
a. The
CSS must refer written requests to reset wages previously set by the IC to the
IC for hearing via a Notice of Referral (NOR).
b. The NOR
must:
i.
Indicate whether BWC recommends the request to recalculate wages be
allowed or denied;
ii. State
the reason(s) for the recommendation (e.g., the wages were previously
calculated based on more detailed evidence); and
iii. Cite the
specific evidence submitted to set wages, including the date the evidence was
received and from whom it was received.
2. The
CSS may request that the Wage CSS completes a new wage calculation worksheet as
evidence for the claim file, upon request by BWC Legal.
1. The
CSS will pay compensation based on a BWC order when:
a. A
BWC Initial Allowance Order includes the granting of compensation and
the setting of wages, and the claim is certified;
b. A BWC
order granting compensation and setting wages is final, or a waiver of appeal
has been filed;
c. A
BWC Tentative Order granting a %PP and a BWC order setting wages are
final, or a waiver of appeal has been filed by the appropriate parties for each
order; or
d. The
IC order awarding compensation, except %PP, is issued, regardless of the wage
order appeal period.
2. Upon
receipt of an IC order that sets wages, the CSS will pay compensation that had
been ordered to be paid but had not yet been paid because wages had not been
set.
3. See
Section V.J, Adjusting Previously Paid Compensation, for
information on adjusting previously paid compensation based on a BWC or IC
order that modifies wages.
1. Claims
services staff will adjust previously paid compensation when the appeal period
for a BWC order which modifies wages expires, and either:
a. No
appeals were filed; or
b. Waivers
are received.
2. Claims
services staff must pay ongoing compensation at the new rate upon receipt of an
IC order that modifies wages.
3. If
the IC order specifically includes the adjustment of previously paid
compensation Claims Services staff will adjust previously paid compensation
and:
a. Release
additional payment due to the IW upon receipt of the IC order; or
b. Issue
the appropriate notification of IC overpayment as specified in the Overpayment
of Compensation policy once the IC order is final.
4. If
the BWC or IC order does not specifically include the adjustment of previously
paid compensation, Claims Services staff will wait until the BWC or IC order is
final and then issue a BWC order to:
a. Adjust
previously paid compensation and release payment due to the IW. Payment cannot
be made until the adjustment order is final or waivers are received; or
b. Create
an overpayment as specified in the Overpayment
of Compensation policy and procedure. The overpayment cannot be
collected until the overpayment BWC order is final or waivers are received.
5.
The period of an adjustment in compensation varies depending on what
caused the wages to be reset.
a.
If a request to reset wages is filed by a party to the claim, and Claims
Services staff determines compensation is payable to the IW, adjustment is
limited to any compensation paid in the two years before the request to reset
wages was filed, per State ex rel. Cobble v. Indus Comm’n. This
adjustment is based on the date payment is made, not the “from” and “to” dates
for which compensation was paid. For example, given the current date as 9/1/2024:
i.
If compensation was paid to the IW on 8/1/2024 for the period 1/1/2021 to
5/1/2021, that compensation would be adjusted because the date the payment was
made was within the last two years.
ii. If
compensation was paid to the IW on 6/1/2021 for the period 1/1/2021 to 5/1/2021,
that compensation would not be adjusted because the payment was not made within
the last two years.
b. If
no request was made by a party to reset wages, all previously paid compensation
affected may be adjusted, per State ex rel. Drone v. Indus. Comm’n.
These modifications to wages are commonly generated when BWC staff discovers an
error in calculation.
c. All
previously paid compensation may be adjusted if the change in wages results in
an overpayment.
1. BWC
staff will refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Must
follow any other specific instructions for claim notes and documentation
included in this procedure.
1. The
Wage CSS must calculate the FWW and/or AWW in the claim using the wage
calculation worksheet whenever possible.
2. The
Wage CSS must:
a. Calculate
wages within five days from the referral date;
b. Prioritize
initial claim determinations and rushes; and
c. Staff
with the Wage Team IMS if they encounter any issues that will delay the wages
calculation.
3. The
Wage Team will attempt to complete all rush requests the day they are received.
Processing time may be impacted by:
a. Volume
of requests received; and
b. Time
of day the request was received.
4. If
the Wage CSS receives a Wages – IW form without supporting
documentation, the Wage CSS will staff with BWC Legal or their IMS as necessary
to determine if earnings without supporting documentation are appropriate to
use.
5. When
the CSS has received wage information but was unable to secure additional information
or clarification, the Wage CSS will attempt to obtain the necessary
information.
a. Reasons
a Wage CSS may need to obtain clarification include, but are not limited to:
i.
An employer submits earnings information and there is a variation in the
earnings;
ii. An
employer submits biweekly earnings, and it is necessary to obtain the breakdown
of the seven days prior to DOI, or DOD in OD claims without overtime; or
iii. Earnings
information is submitted via hard copy, but some numbers are not readable.
b. The
Wage CSS must:
i.
Follow-up with the appropriate parties; and
ii. Wait
for the requested information for two business days after the follow-up
attempt.
c. The
Wage CSS may rely on clarification of earnings obtained by phone.
d. If,
after two business days, the Wage CSS does not receive the requested
information, the Wage CSS must staff with their IMS to determine next steps.
6. Upon
receipt of a request to set wages in a death claim where there are no wages on
file and BWC has been ordered to pay death benefits, the Wage CSS will set the
AWW at $0.
7. Upon
completion of the wage calculation, the Wage CSS must:
a. Ensure
they have included the following information on the calculation worksheet:
i.
The detail of earnings used for the calculations, including the name of
the employer(s);
ii. The
method (or special circumstances for alternate method) used for calculating the
FWW and/or AWW;
iii. The name of the
Wage CSS who completed the calculations; and
iv. The date
the calculations were completed.
b. Image
the completed wage calculation worksheet packet;
c. Rename
the imaged document;
d. Document
the above in claim notes;
e. Enter
the FWW and AWW in the claims management system; and
f.
Create a “Wage Specialist Update Completed” work item to the user with a
due date of the next business day acknowledging completion of the wage
calculation.
1. The Wage
CSS will refer to policy Section IV.C, Earnings Included and Excluded in
Wage Calculation, to determine which earnings to include and exclude in the
calculation of wages.
2. The Wage
CSS may exclude passive income from the calculation of wages after staffing with
their IMS or BWC Legal to ensure the income is, in fact, passive.
3. Part-Time
Work and Unemployment
a. If
an IW worked and received partial unemployment compensation over the same period
and submits evidence that they completed a job search during that period, the
Wage CSS will exclude the earnings from the part-time employment and weeks from
the calculation of wages.
b. If
an IW worked and received partial unemployment compensation over the same
period and the IW indicates that they did not continue a job search during that
time period or fails to submit evidence of a job search, the Wage CSS must include
the earnings from the part-time employment and the weeks in the calculation of
wages.
c. If
seasonal employment is a lifestyle choice, those weeks will be included
regardless of the absence/presence of a job search.
4. If
the Wage CSS suspects that wages reported as income have not been reported to
the Internal Revenue Service (IRS), the Wage CSS may send notification to the
IRS of any discrepancy (e.g., S-Corporation profits, partnership profits)
using IRS Information Referral (Form 3949-A) only after staffing
with their IMS and the BWC Fraud Department.
1. The
Wage CSS must convert earnings that are paid with a frequency other than weekly
or biweekly to a weekly rate for calculating wages using the wage calculation
worksheet.
2. For
example:
a. IW
submitted $1,000 as earnings for the period of Feb. 1 through Feb. 28.
b. Earnings
period equals 28 days.
c. $1,000
divided by 28 = $35.71 per day (rounded to the nearest whole cent).
d. $35.71
times seven = $249.97 per week.
1.
The Wage CSS will use the FWW calculations detailed in policy Section
IV.D, Calculating the FWW.
2. The
Wage CSS will generally use earnings for the full pay periods prior to the DOI,
or DOD in OD claims for the calculation of FWW.
a. However,
if the earnings amount for the actual seven days prior to the DOI or DOD is
available and there is a benefit to the IW, the Wage CSS must use those
earnings in the calculation of the FWW.
b. Earnings
from employers other than the EOR will be applied to the FWW as well if those
earnings fall within the six weeks prior to the DOI.
3. The
Wage CSS must clarify the earnings with the EOR for the seven days prior to the
DOI, or DOD in OD claims as follows:
a. When
earnings are submitted with a frequency other than weekly; or
b. It
is not possible to determine if overtime is included in the reported earnings.
c. If
clarification cannot be obtained, the Wage CSS will calculate a weekly rate as
described in Section VI.D, Converting Earnings to a Weekly Rate, above.
4. When
calculating the FWW:
a. The
Wage CSS will include all earnings they receive, including earnings from
employers other than the EOR for whom the IW worked during the six weeks prior
to the DOI, or DOD in OD claims.
b. The
total earnings for the six weeks prior are divided by six, even if there were
weeks with no earnings.
c. The
Wage CSS may consider when a factory, mine, or other place of employment is
working short time to divide work among employees. The Wage CSS must staff this
issue with BWC Legal.
d. If
no evidence of earnings is provided, the Wage CSS will set the FWW at one-third
of the SAWW.
1. The
Wage CSS will use the AWW calculations detailed in policy Section IV.E, Calculating
the AWW.
2. If
the IW had no earnings during the 52 weeks prior to the DOI, or DOD in OD
claims, the AWW will be set at $0. This happens primarily in OD claims where
the IW retired prior to the DOD. A calculation worksheet is not required.
3. The
Wage CSS will ensure that proper supporting documentation is on file prior to
determining whether to include or exclude periods of unemployment, seasonal
work, or incarceration, as described in Section IV.E.4 of this policy.
a. A
signed Wages – IW form is considered supporting documentation when
considering whether to exclude periods of unemployment due to reasons beyond
the IW’s control.
b. The
Wage CSS may staff with BWC Legal if they are unsure whether to include or
exclude periods of unemployment, seasonal work, or incarceration.
4. Calculating
Earnings for AWW Based on Annual Earnings
a. The
Wage CSS will apportion annual earnings for the year of and the year prior to
the DOI, or DOD in OD claims, such that an average weekly rate for each year is
used for the portion of the 52 weeks prior to the DOI, or DOD in OD claims that
fall in each of the two years. For example, if the DOI, or DOD in OD claims, is
June 30, the earnings used for the calculation of the AWW will be:
i.
26 weeks of the average weekly earnings for the year of the DOI, or DOD
in OD claims; and
ii. 26
weeks of the average weekly earnings for the year prior to the DOI, or DOD in
OD claims.
b. When
detailed earnings are provided for the DOI, or DOD in OD claims, and annual
earnings are used for the year prior, the Wage CSS must use the detailed
earnings for the year of the injury plus the average earnings for the year
prior for the portion of the 52 weeks that falls in the year prior. For
example, if the DOI or DOD is June 30, the earnings that will be used for
calculation of the AWW will be:
i.
The detailed earnings for Jan. 1 to June 30 of the year of injury, plus;
ii. The
average weekly earnings for the year prior to the DOI, or DOD in OD claims, for
the remaining 26 weeks.
5. Special
AWW Setting Scenarios
a. If
the IW presents special circumstances that make the method of calculating the
AWW described above unfair, the Wage CSS may use alternative methods for
setting wages to provide substantial justice but without providing a windfall
to the IW.
b. Reasons
why an alternative wage setting method might be used include, but are not
limited to:
i.
Earning loss attributed to an unsuccessful business:
a) Tax
records are normally used to prove an unsuccessful business, but a statement
from a tax preparer could be used.
b) The Wage
CSS must contact EM staff to compare reported earnings to payroll reported for
premium purposes. EM staff will determine if an employer audit is necessary.
ii. New
in the labor market: If an IW was relatively young, or new to the job market
and the Wage CSS determines earnings would be expected to increase, the Wage
CSS may consider that in determining the AWW.
iii. Seasonal
employees:
a) When
the IW is a seasonal employee, the Wage CSS must investigate the nature of the
seasonal employment and the IW’s intent to work beyond the seasonal employment.
i)
If the seasonal employment is a lifestyle choice, then the period of
unemployment would not be excluded from the calculation, regardless of whether
the IW completed a job search.
ii) Registration
and receipt of unemployment benefits alone is not sufficient proof of a job
search effort for seasonal employees.
iii) See Section V.C.10.b
for additional information regarding seasonal employees.
iv. School
employees:
a) The
AWW for teachers and school employees is calculated by dividing the entire
salary for 52 weeks (less any weeks otherwise excluded), whether the employee chose
to receive pay over nine months or 12 months.
b) Weeks for
the summer break will only be excluded if the employee regularly has other work
over summer break but did not work for reasons outside their control (no work
was available), or if the employee was disabled for the period.
c) Any
wages from summer break employment will be included in calculating the AWW.
v. Volunteers:
a) The
coverage contract between the employer and BWC (e.g., Contract for Coverage of State Agency or
Political Subdivision (U-69)) will specify what the AWW is, or how
it should be calculated.
b) In claims
filed by volunteers with no contractual arrangement regarding AWW and no
earnings from other employers, the Wage CSS will staff the setting of wages
with BWC Legal to consider setting wages at $0.
c) Wages
for volunteers will include earnings from other employers, if provided.
d) The Wage
CSS will set wages in a claim for a volunteer only when compensation other than
scheduled loss will be paid.
i)
If only scheduled loss is paid it is not necessary to set wages for the
IW.
ii) Scheduled
loss is paid based on the SAWW for the DOI or date of disease in OD claims.
vi. Self-employed
IWs:
a) When
no earnings are available, the Wage CSS will set the AWW for self-employed IWs
using the minimum payroll reported for purposes of setting premium.
b) When
earnings are submitted, the Wage CSS will staff with EM personnel to compare
earnings reported with payroll reported for premium.
i)
If earnings submitted are less than the payroll reported, wages will be
set based on the earnings reported.
ii) If
earnings submitted are more than payroll reported, but appear to be legitimate,
the Wage CSS will set wages based on the earnings submitted and staff with EM
to determine if a premium audit will be done.
iii) If earnings
submitted are more than the payroll report but there is some question about their
legitimacy, the Wage CSS will make a referral to EM for a premium audit.
vii. Injuries while
involved in a vocational rehabilitation plan:
a) The
FWW and AWW in claims that occur during participation in a vocational
rehabilitation plan will be set equal to the wages in the claim for the
original injury.
b) Compensation
maximum and minimums are based on the DOI, or DOD in an OD claim, in the newly
filed claim.
c. The
Wage CSS must staff special wage setting situations with their IMS and/or BWC
Legal.